Esade estimates that the Spanish economy will register GDP growth of 5.9% in 2021This percentage is significantly lower than that of the Government, which forecasts growth of 7.2% that could rise to 9.8% thanks to European funds.
This is reflected in the ESADE Economic and Financial Report for the first half of 2021, a document prepared in collaboration with Banco Sabadell. Despite the fact that its forecast for Spain is lower than that of the Government, the 5.9% forecast for the country is higher than the growth estimated for the world as a whole and for the euro zone, which Esade places at 5.2%.
On the other hand, the report indicates that the extension in time and number of the Temporary Employment Regulation Files (ERTE), the management of European funds and potential business bankruptcies are the main challenges that will be posed to the Spanish economy during 2021.
For this reason, it warns that the road to recovery in Spain will be more complex than in other economies, due to its excessive dependence on the service sector, the difficulties in controlling the pandemic and a very high number of small companies with financial difficulties .
In addition, it warns that the bad start to the year, with the rise of the third wave and the tightening of restrictions, suggests that people in ERTE will remain between 600,000 and 800,000, a range that will involve an expense during the first months of the year that was not contemplated in the General State Budgets.
«These ERTEs, which have been essential to mitigate the increase in unemployment, are not a measure that can be extended indefinitely since sooner or later, those responsible for economic policy will have to allow a reassignment of a part of the workers still in ERTE to other sectors with greater activity and job creation ”, according to the study.
But the crisis has also brought with it a strong inequality. «By percentiles, wage losses have been uneven. The greater or lesser option of teleworking has influenced this ”, explained the director of the Center for Economic Policy (EsadeEcPol), Toni Roldán. The coronavirus crisis has caused the number of households with income below the poverty line has increased from 25.95% to 35.5%. In addition, the Esade professor Josep M. Comajuncosa, has called that despite the reduced fiscal margin of the Executive, this deployment helps companies. “The longer we take to be able to give aid to SMEs, the greater the probability that delinquencies will spread,” he explained.
In relation to the management of the Next Generation EU recovery funds, Esade experts speak of the «Colossal economic and administrative challenge» which involves presenting specific projects that meet the requirements established by the European authorities.
In his view, it is crucial for the future of the economy that these grants reach small and medium-sized companies, and can promote more inclusive and environmentally friendly growth, as well as the structural transformation necessary to cope with digitalization and the transition to a non-carbon green economy.
“The evolution of the productivity of the entire business fabric and its ability to compete throughout the global economy, and to generate new, more qualified and well-paid jobs, will depend on this transition,” says the report.
Finally, in order for this process to be carried out, Esade’s Economic and Financial Report insists on the need for medium-term fiscal planning, which helps Spain reduce its debt and have room to implement other economic policies that they will be needed in the future.